In the early autumn of 1981, Bill Shankly suffered a heart attack and was rushed to Liverpool’s Broadgreen Hospital. The former Liverpool manager was 68 years old and otherwise in rude health; he neither drank nor smoked, and exercised daily. Even at such a grave time there was an aura of invincibility about him. Death had been a recurring theme in his rich litany of sayings; “When I go, I’m going to be the fittest man ever to die,” he would promise, but – as with his periodic threats to quit Liverpool, through the 1960s and early 1970s – nobody believed that he would ever pass on.

Shankly was, however, a man of his word. Three days later, on 29 September, he had a second, massive heart attack and died that morning. To a city still reeling from the Toxteth riots and beset by mass unemployment, news of Shankly’s death was a huge blow. Like the murder of John Lennon in New York nine months earlier, his passing touched the entire city; Shankly transcended the great Liverpool-Everton divide.

Bill Shankly was always more than a great football manager. He was football’s Muhammad Ali: a charismatic maverick whose utterances had an unexpected, undeniable poetry. Between his appointment as Liverpool manager in December 1959 and his retirement 15 years later, he transformed a second-rate club, stuck in the lower ranks of the Second Division, into the finest team of its generation, winning three First Division titles, two FA Cups, a Second Division title and a Uefa Cup. He led Liverpool like a revolutionary leader, casting his personnel not just as footballers but soldiers to his cause, and became a folk hero to the fans. At the same time he laid the foundations of the team that dominated the First Division and European competition for the decade that followed his retirement.

Yet by the time of his death Shankly was a tragic figure, the forgotten architect of Liverpool’s footballing supremacy. Almost from the day he announced his retirement in July 1974 he considered it the worst mistake of his life: Shankly could not live without football, but the game carried on without him. Harder still was that Liverpool became an even more formidable force, and later banned him from their training ground at Melwood, where the newly retired Shankly had tried to rediscover some of the camaraderie that once filled his life. Shunned by his former club and increasingly bitter at his treatment, he searched unsuccessfully, during his last years, for a meaningful role in the game he loved. “It was,” said Kevin Keegan, “the saddest, saddest thing that ever happened at Liverpool.” Shankly was a fit man; but he died, in the words of the former Leeds player Johnny Giles, of a broken heart.

One of 10 children, Bill Shankly was born in the Ayrshire coalmining village of Glenbuck in 1913. It was a poor upbringing. His schooling was rudimentary, and although he displayed a fierce intelligence as a man, it lacked the polish of a formal education. At 14, Shankly left school and went to work at the local colliery. He spent more than two years down the pit.

Football, even in an age when players’ earnings were deflated by the maximum wage, was a way out. Around 50 of Glenbuck’s sons, including Shankly’s four brothers, made it as professional footballers in the first half of the 20th century. Shankly signed for Carlisle United in 1932, but it was with Preston North End, whom he joined a year later, that Shankly made his name as a player. A gritty right half, he made 337 appearances – a tally cut short by the war – over 16 years for the Lilywhites, including FA Cup finals in 1937 and 1938, the year Preston last won it. “He was a very enthusiastic player and a very good player,” Preston legend, Sir Tom Finney tells me when we meet at Deepdale. “He talked an awful lot about the game off the field. He was always a larger than life character and he was always prepared to talk to you about your career.”

Even as a player, Shankly’s destiny seemed to be in management. Finney says that he made a big impression on himself and the younger players. “He was always a football fanatic, you could tell from the moment he left playing that he was going to be a manager,” he says. In 1949, when Shankly was 36, he returned to manage Carlisle.

But there was no dramatic ascendancy. A qualified success at Brunton Park, he managed in the lower leagues for a decade, with spells in charge of Grimsby, Workington and Huddersfield. Never did a Shankly team finish higher than 12th in the Second Division during this time.

Yet his infectious personality and knack of developing outstanding young players, such as Denis Law and Ray Wilson, got him noticed by bigger clubs. In November 1959 Shankly was approached by two men at the end of a Huddersfield game. One was Tom Williams, the Liverpool chairman, the other Harry Latham, a director. “How would you like to manage the best club in the country?” asked Williams. “Why?” Shankly replied, sharp as ever. “Is Matt Busby packing it in?” A few days later, Shankly was unveiled as Liverpool’s new manager.

To imagine the state of Liverpool FC in 1959, you must conjure something entirely different to today’s institution. It was, recalled Shankly’s successor as manager, Bob Paisley, a “happy-go-lucky, slap-happy” place, with the directors content for the club, then below Shankly’s Huddersfield in the Second Division, merely to get back to the top flight “and go along three or four places off the bottom”. Although the club was well supported, its infrastructure was second-rate: Anfield and the training ground at Melwood were dilapidated; directors regularly meddled in team selections. Funds for transfers were rarely forthcoming.

Although Shankly would transform Liverpool, the messianic qualities that brought him fame and adoration were not immediately evident. At the club’s AGM after failure to win promotion in 1961, Solly Isenwater, chairman of the shareholders’ association, having demanded to know if Shankly had been letting his teams take it easy, tried to hold a vote of no confidence in the board. Average attendances had already dropped from around 40,000 when Shankly took over to fewer than 30,000.

Shankly turned it around, winning promotion within a year. Supported by his clever coaches, the boot-room staff – Paisley, Joe Fagan and Reuben Bennett – that would enter club lore, he transformed Liverpool through sheer force of personality. As Keegan later said, he put “his character into the club in every facet from the bottom to the top”. He instilled pride, discipline, loyalty and a relentless work ethic. He bought astutely and galvanised those new players, while ruthlessly ridding himself of those who had kept the club in mediocrity. He made everyone involved believe that Liverpool were the best team in the world even at a time when they were, quite palpably, the second best in their city.

Remarkably, the First Division title was won in 1964, just two years after promotion, and again in 1966. Liverpool won their first FA Cup in 1965 and among the red half of the city Shankly began to assume the aspect of a god.

Defender Tommy Smith, the so-called “Anfield Iron”, joined Liverpool as a 15-year-old in 1960 and was made captain in 1970. He says that Shankly became like a father to him – Smith’s own father had died shortly before he signed, and Shankly “took care” of him. The father-son relationship was common in Shankly’s dressing room. John Toshack, who was signed as a 21-year-old striker from Cardiff City in 1970, says he was in awe of Shankly from the moment he met him. “He inspired us in every way,” says Toshack, now manager of Wales, “his belief in Liverpool Football Club, the standards he set for himself and for the club, the intensity that he went about his job. His quote about football being more important than life or death, he really felt that way. He rammed it into us how important it was to be playing for Liverpool, how privileged we were to be playing for these people. We really believed that.”

At the decade’s end Shankly refashioned his team, rebuilding it around outstanding youth team players and hungry unknowns, such as Keegan and Ray Clemence, whom he had plucked from the lower leagues. “He looked at people and wanted to see himself: in terms of self-motivation, wanting to win, wanting to play football,” says Brian Hall, the pocket-sized midfielder Shankly signed in the late 1960s. “If you had those sort of character traits you were good enough for him.” Shankly’s Liverpool won their third league title in 1973, and narrowly missed a league and cup double a year later, when they finished league runners-up, but won the FA Cup with a 3-0 win over Newcastle in a display of magnificent domination.

At the end of that game a Liverpool fan ran onto the pitch and threw himself at Shankly’s feet so that he could kiss his shoes. He did not know that Anfield’s messiah had just managed Liverpool for the last time.Liverpool’s chief executive, Peter Robinson, and the Anfield board of directors had grown so used to Bill Shankly threatening to resign as to become blasé about it. A 1967 resignation letter sat in Robinson’s filing cabinet, unretracted. Every summer, during the long football-less months, a kind of depression consumed Shankly. Put simply, he could not live without his daily fix of football. In these moments of despair he would talk of “finishing”, of walking out on the club and retiring. Then the players returned for pre-season training and the despondency lifted and Shankly was his ebullient self again.

But in the summer of 1974, Shankly insisted that he was quitting. “I think that perhaps it was tiredness, that football had taken its toll on him,” says his granddaughter, Karen Gill. Peter Robinson initially played along, thinking he was crying wolf, but as he realised that Shankly was unmovable he started to search for ways for him to stay – in any capacity.

At a press conference on Friday 12 July, Shankly made public his decision. “It’s one of those moments in time, like when Kennedy was shot,” says Brian Hall. “I couldn’t believe it because he was so besotted with the game, with Liverpool Football Club, and with the fans.”

Hall believes that the pressures of being not just a manager but an icon had taken their toll on Shankly. “He put enormous pressure on himself,” he says, “because every time he stood up in front of people, whether it be the media boys, or fans at a dinner or a school function or whatever he did, he had to produce a performance that was Shankly-like. It had to be dramatic, it had to be poignant, it had to hit nails on heads. I just have a sneaky feeling that the pressures of football management and the pressures of who he was and how he had to perform in front of people became too much in the end.”

“He was always on stage,” says John Keith, who as the Daily Express Merseyside correspondent, knew him well. “We were all Boswells, waiting for the words to drop out of his mouth.”

As a player and manager Shankly had lived in a world not just of men, but one of men’s men. In giving up football for family life, Shankly was turning his back on what he had known: his family was dominated by women. His attempts at domesticity failed because he just couldn’t overcome his football obsession. “He lived and breathed football from morning to night. If he wasn’t watching it, he’d be talking about it or playing,” says Gill. “Even when he was having lunch the whole table would turn into a massive football field and he’d be moving objects around. He couldn’t get football out of his mind.”

Holidays to the Lancashire resort of St Anne’s revolved around beachside kickabouts with hotel waiters. Everyday outings with his family, to a cafe or the shops, would be taken over by fans wanting to chat. Bill always had a word. “It was kind of annoying,” says Gill. “But we had nothing to compare it to: that’s just the way it always was. It was never as if there was a nice quiet period when we had him all to ourselves.”

Shankly soon realised that in leaving Liverpool he had made a terrible mistake and started to rail against his self-imposed exile from the game. “Retire is a terrible, silly word,” he said. “They should get a new word for it. The only time you retire is when you’re in a box and the flowers come out.” And so, he busied himself in the only way he knew – by throwing himself back into the sport he loved.

When the Liverpool players reported back to Melwood for pre-season training, days after he had announced his retirement, they may have been surprised that Shankly was there to greet them, dressed in his training kit as if nothing had happened. This might seem unusual, but both Merseyside clubs at the time had an open door policy at their training grounds, welcoming former staff to use their facilities.

Shankly, who believed physical activity to be redemptive, had come to join training with his former colleagues and stay fit. But the players still greeted him as “boss”, while his reluctant successor, Bob Paisley, was just “Bob”. Paisley’s initial pleasure to see him soon turned to polite embarrassment as it became clear that he was being undermined by Shankly’s presence.

“He started taking the training,” says Tommy Smith. “Prior to that, as a manager, he didn’t actually take the training, he’d walk around and talk to Reuben Bennett, Joe Fagan and Bob Paisley and tell them what to do. But he started taking the training! In the end, Bob Paisley, purely for his own sanity, had to say to him: ‘Bill, you don’t work here any more. This is my team here, I’ve got things I want to do.'”

“It was difficult for Bob, having him hanging around,” says Toshack. “We’re not just talking about any member of the coaching staff who’s retired, who just came to Melwood to have a bit of jogging around and a shower and that was it. Shanks was Liverpool; he was an institution.” Eventually, with Paisley threatening to resign, Shankly was asked to stay away by the club chairman, John Smith. It was a decision Shankly bitterly resented for the rest of his days.

Shankly often drew a contrast in his treatment by Liverpool and Matt Busby’s at Manchester United. When Busby retired in 1969, he was given a place on the Old Trafford board and continued to play a role in the running of the club. But Shankly’s relations with the Anfield board had frequently been acrimonious. “At a football club, there’s a holy trinity – the players, the manager and the supporters,” he once said. “Directors don’t come into it. They are only there to sign the cheques.” Not normally a man to harbour grudges, he seemed to have been governed by a different set of principles in his dealings with the boardroom. In 1962, for instance, Johnny Morrissey was sold to Everton without Shankly’s knowledge, and more than a decade later he was still furious about it. The 1967 resignation letter was written after he lost out on the signing of Howard Kendall by Everton. Again, Shankly blamed the board and stormed out of Anfield. He stayed away for a few days before returning, and even then sullenly refused to retract his resignation letter, while carrying on his work.

“I used to fight and argue and fight and argue and fight and argue until I thought, ‘Is it worthwhile all this fighting and arguing?'” Shankly said. “It is bad enough fighting against the opposition to win points but the internal fights to make people realise what we were working for took me close to leaving many times.”

Such episodes were pardoned by Robinson, but board members were less forgiving. “When he finished he thought he was going to become a director, but the directors got their own back,” says Tommy Smith. “I don’t think they were out to get him, but I think there was an opportunity whereby Bill Shankly had retired and they said: ‘Right, that’s it, we’ve got rid of him at last.'”

Smith says that Shankly’s predicament was an accumulation of mistakes by the board, that stemmed from their inherent misunderstanding of football matters and their treating him as a mere employee. “They didn’t realise that he was a god on Merseyside because they didn’t mix with the fans,” he says. While Liverpool was an “ego trip” to them, for Shankly it was his life. “They knew nothing about football. They were just businessmen.”

John Keith believes that Shankly’s huge charisma also worked against him and that Liverpool’s board could not be blamed for wanting to keep him on the outside, having previously gone “on bended knee” to retain him. “He was such an overpowering figure,” he says. “He wasn’t like Paisley, who [later] went on the board and let the manager manage.” Besides, Matt Busby’s time as a Manchester United director had been a disaster, with the club relegated in 1974. Could Liverpool have risked their own back-seat driver? While the club’s treatment of Shankly at first seems shameful, in shunning him they were merely following the same relentless winning ethic that Shankly himself had instilled. And their ruthlessness was vindicated by an unprecedented haul of league titles and European Cups under Paisley.Exiled from the Liverpool training ground but still deeply in love with football, Shankly began to search for other ways to slake his thirst for the game. Unsurprisingly, given his gift for a quip, he flourished when given media work, which, by the standards of the era, came fairly frequently. For a period, he presented his own chat show on the Liverpool station Radio City, interviewing such figures as Harold Wilson, Freddie Starr and Lulu. Sometimes he worked for the same station as a match pundit, working in the commentary box with a young Elton Welsby.

Because he was so approachable, quotes from Shankly were always easy for journalists to come by. Sometimes he was manipulated: after Liverpool beat Borussia Mönchengladbach to win the European Cup in 1977, Shankly was quoted by the Daily Mail as saying his former club were not the best team in Europe. And so the schism deepened and the discontent between club and former manager rumbled on.

Some of those who met Shankly in these last years have portrayed him as a man desperate for attention. I was once told that when Shankly was in the press box, working as a pundit, he would always leave a few minutes before the end of the game to the puzzlement of everyone there. It was deduced that this was so that he could position himself by the entrance of the Anfield boardroom and be seen by all the old faces – board members, former opponents, journalists – as they made their way in after the game.

John Roberts, the Daily Express journalist who became Shankly’s ghostwriter, rebuts this suggestion. “He was never short of an audience,” he says. “Because he was always a man of the people type. I don’t go along with the ‘dying of a broken heart’ thing. He still had a great sense of humour. A huge important slice had been taken out of his life, but he’d brought it about himself. He’d retired, they hadn’t pushed him out. But he felt that he’d be annexed to Liverpool FC for life, in some capacity, and that didn’t happen. But he was still full of good humour. He’d go to Anfield, he’d go to matches, he’d still have the passion.”

A year after retiring, Shankly sat down and wrote his autobiography with Roberts. Perhaps the most candid passages dealt with Shankly’s retirement. On his treatment by Liverpool, he wrote it was scandalous and outrageous that he should have to issue complaints about a club he had helped to build. But while Shankly’s fury burned from the page, there was no sadness about him, says Roberts. Indeed Shankly remained an ebullient man. “But he did feel that he had been let down by Liverpool; by the directors, mainly.”

Shankly also revealed his shock that he had found solace at once-hated rivals Everton. “I have been received more warmly by Everton than I have been by Liverpool,” he wrote. Indeed, on being exiled from Melwood, he began turning up at Everton’s training ground, Bellefield, where he trained and sometimes helped Everton’s club captain, Mick Lyons, coach the junior teams.

To ambitious young managers, such as Brian Clough and Ron Atkinson, Shankly also became a counsellor. He briefly took up advisory roles at Wrexham and Tranmere Rovers, where he helped his old protégé, Ron Yeats, who was starting out as manager. As at Melwood, the players took to calling Shankly, rather than Yeats, boss. In November 1976, Shankly was hotly tipped to take over from Dave Mackay as Derby County manager, but the position went to Colin Murphy instead. Shankly, says Toshack, was very much a help when he went into management with Swansea City in 1978. “He was in the dressing room with us at Preston when we went up that first year. Whenever we played in the north-west I’d invite him and he’d come along to the hotel, he’d have lunch with the players and give them a boost. I can remember him walking into a room, and saying ‘Jesus Christ, John, who you going to leave out, what a team you’ve got.’ And of course some of the local lads, the Swansea lads that didn’t know him, hung on every word he said.”

While Shankly seemingly enjoyed these experiences, they remained mere interludes. Without more concrete roles within the professional game, he resorted to the grassroots of Merseyside soccer to get his football fix. “To a young coach, it was an incredible experience working with Shankly,” says Charles Mills, who met him in 1975, when he was starting out as PE teacher at an outdoor activity centre on the Wirral. “He came down to help us for the day, and stood with me on the sidelines, offering me advice. He was a humble man, despite this reputation as a no-nonsense Scot. As an Everton fan, I’d always regarded him as the devil incarnate, but my view changed after meeting him.”

Shankly’s modest 1930s semi-detached home on Bellefield Avenue became a place of pilgrimage for supporters and schoolboys. The Shanklys always treated such visits with patience and kindness, inviting people in for a cup of tea and passing out signed photographs to anyone who asked. On away trips he would circulate among Liverpool supporters like a concerned uncle, ensuring they had tickets or the fare to return home. Stories of Shankly handing out wads of cash or tickets to Liverpool fans are legion.

On Fridays Shankly played five-a-side in Stanley Park with ex-pro Johnny Morrissey, famous for “crossing the park” from Liverpool to Everton. “Sometimes when I asked how he was, he’d rub his knee or shin, and say ‘Ah, I’ve got the odd twinge here, but I’ll be OK, I’ll be OK!”‘ says John Roberts. “In his mind he was still the professional footballer who’d played for Preston or Scotland. He talked as if he wanted to give the impression that he’d be fit for the next match.” When there was no other game on, Shankly would head down to his local park and join in kickabouts with schoolboys. “There were always kids coming up to the front door, asking if he could come out to the bottom of the road and have a kickaround,” says Karen Gill. “It was his life, he couldn’t not do it, it was part of him. That’s the way he kept going.”

The personal demons – drink, depression, poverty – that consumed other forgotten stars never afflicted Shankly. His tragedy was always more oblique than that. He was addicted to football and struggled to function without his daily fix, but at the highest level, where he belonged, he was considered yesterday’s man, or, worse, an embarrassment. “He was a sad figure in many ways,” says John Keith. “He always wanted to be associated with football and he used to turn up in all these places. But I suppose you could say he sprinkled stardust in the dark recesses of the game.”Only after his death, perhaps, did Liverpool realise what they had lost. The club hastily erected the Shankly Gates, 15-foot high cast-iron gates which stand in front of the Anfield Road stand and are inscribed “You’ll Never Walk Alone”. They were “unlocked” by his widow Nessie at a low-key ceremony 11 months after his death. “He would have loved to have walked through the Shankly Gates: what greater honour could you get?” says John Roberts. “But they never went up until he was dead.”

Kevin Keegan has suggested that only renaming Anfield the Shankly Stadium would be an appropriate memorial. “That stadium wouldn’t be what it is now if it wasn’t for Bill Shankly,” he said in 1995. “They might still be a club with no direction as they were when he joined. The gates are not enough, nowhere near enough and the club know that.” In 1997 a seven-foot tall bronze statue of Shankly was unveiled outside the Kop; not that Liverpool paid for it – the club’s sponsors, Carlsberg, funded the memorial. “Bill Shankly was probably the greatest manager in the world,” said their spokesman in a tawdry exhibition of commercialism that Shankly, a teetotaller and socialist, would probably have found deplorable.

You wonder what Shankly would make of the current state of Liverpool, since American businessmen Tom Hicks and George Gillett purchased it for around £300m in February 2007. In January last year, Hicks and Gillett restructured their purchase of Liverpool, so that they loaded the club with £350m worth of debt. In July, despite the credit crunch, Royal Bank of Scotland and Wachovia agreed to refinance the deal. Liverpool supporters are effectively paying the Americans’ mortgage repayments for years to come.

Equally the actions of some fans would have dismayed Shankly: Hicks’s son, a Liverpool director, was spat at and jostled when he tried to explain himself to supporters in an Anfield pub and the businessmen have also received death threats. More bizarre were banners on the Kop calling an “SOS” to Dubai International Capital, a rival investment fund about whose plans to buy Liverpool little is known, but who are somehow deemed a less worse alternative to the Americans. But such are football’s mad loyalties in the 21st century, with supporters so desperate for success that they will demand it even if it involves selling the very heart of the club they claim to love.

“The integrity of football is being ruined. Money’s killed it,” says Tommy Smith, who laments the loss of the more innocent age in which he starred. Karen Gill agree, “It’s all about making money. Things that my grandad would never have understood or approved of.”

In Shankly’s mind, Liverpool belonged to the people – not the directors, shareholders, or – inconceivable though it might have seemed in the 1970s – a faceless overseas investment fund. After winning the FA Cup in 1974, Shankly stood on the steps of St George’s Hall, opposite Liverpool’s Lime Street railway station. At least 100,000 supporters stood before him, but the crowd was hushed to an absolute silence. Then, with one hand in his pocket, and his team standing behind him, he started talking: “Since I came here to Liverpool, and to Anfield, I have drummed it into our players time and again that they are privileged to play for you. And if they didn’t believe me, they believe me now.”

The crowd let out a cheer and started chanting his name. Shankly raised his hands and turned to his team, before facing his crowd again, arms still aloft as the staccato shouts of “Shankly, Shankly” rose in a deafening crescendo.